Acct504_MCQs_02 Dec

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Description

Slappy Corporation
leases its corporate headquarters building. This lease cost is fixed with
respect to the company’s sales volume. In a recent month in which the sales
volume was 20,000 units, the lease cost was $482,000.

1.

To the nearest whole
dollar, what should be the total lease cost at a sales volume of 16,900 units
in a month? (Assume that this sales volume is within the relevant
range.)

A.

$407,290

B.

$482,000

C.

$570,414

D.

$444,645

2.

To the nearest whole
cent, what should be the average lease cost per unit at a sales volume of
19,200 units in a month? (Assume that this sales volume is within the
relevant range.)

A.

$28.52

B.

$24.60

C.

$25.10

D.

$24.10


Getchman Marketing,
Inc., a merchandising company, reported sales of $592,500 and cost of goods
sold of $305,000 for April. The company’s total variable selling expense was
$37,500; its total fixed selling expense was $16,000; its total variable
administrative expense was $35,000; and its total fixed administrative
expense was $38,900. The cost of goods sold in this company is a variable
cost.

3.

The contribution
margin for April is:

A.

$465,100

B.

$287,500

C.

$160,100

D.

$215,000

4

The gross margin for
April is:

A.

$287,500

B.

$215,000

C.

$537,600

D.

$160,100

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A company has
provided the following data:

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5. If the sales volume decreases by 25%, the
variable cost per unit increases by 15%, and all other factors remain the
same, net operating income will:

A.

decrease by
$31,875.

B.

decrease by
$15,000.

C.

increase by
$20,625.

D.

decrease by
$3,125.

6. Balonek Inc.’s contribution margin ratio is
57% and its fixed monthly expenses are $41,000. Assuming that the fixed
monthly expenses do not change, what is the best estimate of the company’s
net operating income in a month when sales are $112,000?

A.

$63,840

B.

$7,160

C.

$71,000

D.

$22,840

A manufacturing
company that produces a single product has provided the following data concerning
its most recent month of operations:

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7. What is the absorption costing unit product
cost for the month?

A.

$102

B.

$130

C.

$97

D.

$125

8. Veltri Corporation is working on its direct
labor budget for the next two months. Each unit of output requires 0.77
direct labor-hours. The direct labor rate is $11.20 per direct labor-hour.
The production budget calls for producing 7,100 units in October and 6,900
units in November. The company guarantees its direct labor workers a 40-hour
paid work week. With the number of workers currently employed, that means
that the company is committed to paying its direct labor work force for at
least 5,480 hours in total each month even if there is not enough work to
keep them busy. What would be the total combined direct labor cost for the
two months?

A.

$122,752.00

B.

$120,736.00

C.

$120,881.60

D.

$122,606.40

9. A company’s current net operating income is
$16,800 and its average operating assets are $80,000. The company’s required
rate of return is 18%. A new project being considered would require an
investment of $15,000 and would generate annual net operating income of
$3,000. What is the residual income of the new project?

A.

20.8%

B.

20%

C.

($150)

D.

$300

Beall
Industries is a division of a major corporation. Last year the division had
total sales of $20,160,000, net operating income of $1,592,640, and average
operating assets of $8,000,000.

10.

The
division’s margin is closest to:

A.

39.7%

B.

47.6%

C.

7.9%

D.

19.9%

11.

The
division’s turnover is closest to:

A.

2.52

B.

2.10

C.

0.20

D.

12.66

12.

The
division’s return on investment (ROI) is closest to:

A.

19.9%

B.

16.6%

C.

1.6%

D.

5.7%

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